Impact of Capital Structure on the Profitibality of Petroleum Sector in Pakistan

Abstract

This study aims to analyze the impact of capital structure on the profitability of petroleum sector of Pakistan, while controlling the size of the company. A total of 12 companies were selected randomly for the study and take ten years data from 2001 to 2010. Regression analysis was conducted. The results show that there is a significant and positive impact of capital structure on the profitability of the petroleum sector; this study has potential for replication in other industries like cement, textile and pharmaceutical. In over all analysis capital structure has the significant analysis but the individual analysis of every company has not significant because every company has their own capital structure. Overall Profitability depend on the capital structure.